Don't Miss Out! The September 15 ITR Deadline Looms: Your Ultimate Guide to Reporting TDS on FDs & More

Attention taxpayers! The clock is ticking, and the September 15 deadline for filing Income Tax Returns (ITR) for those subject to audits is just around the corner. While many focus on salaried income, a crucial area often overlooked is the accurate reporting of Tax Deducted at Source (TDS) on Fixed Deposits (FDs), savings interest, and other financial income.

Failing to correctly declare these amounts can lead to discrepancies, penalties, and unnecessary headaches with the Income Tax Department.

Fixed Deposits are a popular investment choice, but the interest earned is taxable. Banks are mandated to deduct TDS if the interest income from an FD exceeds a certain threshold (currently Rs 40,000 for general citizens and Rs 50,000 for senior citizens).

This deduction, typically at 10% (or 20% if PAN is not linked), often goes unnoticed until tax season. However, your tax liability isn't just the TDS; it's on your total income, and you must declare the full interest earned, not just the amount after TDS.

Your first and most vital step is to always check your Form 26AS.

This statement provides a consolidated view of all tax deducted or collected against your PAN. It's your personal ledger of tax credits. Ensure that all TDS deducted by banks on your FDs, as well as any other income like professional fees, rent, or lottery winnings, is accurately reflected here. Any mismatch between your records and Form 26AS can raise a red flag.

Let's navigate the common scenarios for reporting:

• TDS Matches Form 26AS: This is the simplest scenario.

  Declare the full interest income under 'Income from Other Sources' in your ITR. The TDS credit will automatically adjust against your total tax liability. If you've paid more tax than required, you'll be eligible for a refund.

• TDS Deducted but Not in Form 26AS: This is a serious issue.

  If your bank has deducted TDS but hasn't deposited it with the government or failed to update it in your Form 26AS, you must immediately contact the bank. You cannot claim credit for TDS not reflected in Form 26AS. Get it rectified before filing!

• No TDS Deducted: This can happen if your total interest income for the year is below the threshold, or if you submitted Form 15G (for non-senior citizens) or Form 15H (for senior citizens) to declare that your total income falls below the taxable limit.

  Even if no TDS was deducted, you are still obligated to declare the full interest income in your ITR. Your tax liability will be calculated based on your applicable slab rate.

• TDS Deducted on a Joint Account: If an FD is held jointly, the interest income is typically attributed to the first holder, and TDS is deducted against their PAN.

  However, if the income actually belongs to the second holder, it can be reported by them, but ensuring the TDS credit is appropriately claimed requires careful attention and often a declaration between the account holders to avoid issues.

Ignoring these details is not an option. The Income Tax Department relies heavily on data matching.

Discrepancies between your declared income, TDS certificates (Form 16A from the bank), and Form 26AS will lead to notices and potentially audits. It’s better to be proactive and ensure all details are correct before hitting that submit button.

If your total tax liability is less than the TDS deducted, you are entitled to a refund.

Ensure you provide correct bank details in your ITR to facilitate a smooth and timely refund process. Remember, timely and accurate reporting not only helps you avoid penalties but also contributes to a transparent and efficient tax system. Don't let this September 15 deadline catch you off guard – file smart, file right!